WRAPUP 8-Argentina says next bond payment 'impossible', default looms

BUENOS AIRES/NEW YORK, June 18 (Reuters) - Argentina
threatened to default on its debt on Wednesday when the
government called it "impossible" to pay bond service due on
June 30, citing a U.S. court decision earlier in the day that
increased pressure on the economically ailing country.

Buenos Aires is locked in a 12-year legal fight with
creditors who refused to participate in two restructurings that
followed Argentina's 2002 default on $100 billion in bonds.

The long impasse in the U.S. courts has kept the country
from accessing international capital markets as its economy
stagnates, inflation soars and central bank reserves fall.

On Monday, the U.S. Supreme Court declined to hear an appeal
by Argentina in its battle against the hedge funds which refused
to take part in restructurings offered in 2005 and 2010. This
left intact a ruling by U.S. Judge Thomas Griesa in New York
ordering the country to pay the hedge fund "holdouts".

The 2nd U.S. Circuit Court of Appeals on Wednesday lifted
the stay it had placed on an injunction by Griesa barring
payment to holders of restructured bonds via U.S. banks unless
the "holdouts" were paid $1.33 billion at the same time.

"The lifting of the stay by the Second Circuit makes it
impossible to make the next payment on restructured debt in New
York, and shows a complete lack of willingness to negotiate
under conditions different from those dictated by Judge Griesa,"

a statement from the Argentine economy ministry said late on
Wednesday.
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